As a young professional just after the college the first job that you try to pick is the one that fascinated you over all these years. Your first step towards becoming financially independent and getting the first paycheck is an exciting moment of success for you but with the new freedom that you get it comes with lot of other responsibilities. A major responsibility is like supporting your parents and if you are eldest then you always need to be there hand in hand with your father to support your younger siblings.
At lot of this needs a proper planning. You have to actually start defining things well in advance so that you are able to finely strategize your steps accordingly. Which financial instruments are best suited for you are tough questions to answer?
To start with you actually need to understand your goals in details. It can be anything like buying your first car. While defining your financial goals which are supposed to be achieved after a certain period of time we actually need to define the monetary value of the same. This value has to be powered by hard core inflation numbers because you never know what would be actual value of your goal as per market prices when you are nearing to achievement.
When you are looking at insurance you are actually looking at protecting your goals. So when you plan goals you always know that the real beneficiary is not just you but your family is also major stakeholder. Even if you are not there to support them with the goals the achievement of same is mandatory. So here what plays an important role is your life insurance policy. Say if you are only person who is supposed to be supporting your father for your younger brother’s education , if you are healthy and hearty everything is ok but you can’t predict the future ,what happens if you are not there to help your father then in that case your insurance cover takes care of the same.
Like other forms of insurance life insurance is a great enabler in this case.
As per the thumb rule goes you should always have 10 to 15 times cover of your annual post tax income so that it can support your family for the next 10 to 15 years. Even if you are not there should be sufficient financial support for your family to help them trouble times.
When we are looking at life insurance there are several types of life insurance plans. Some plans only come with plain vanilla cover called the term plan in which your beneficiaries only get the benefits when you are not there. To be defined in technical terms these types of plans only provide post death benefits and you get nothing if you survive. The other forms of life is called endowment where your beneficiaries enjoy the benefits if you are not there but you even get a money in return even if you survive growing over the period at the rate of 5% to 6% per annum